Is there a crisis in the advertising market: says the chairman of the board of directors of Russia's largest media group

According to the ratings of the Association of Communication Agencies of Russia ( ACAR ) and the publication Sostav.ru , this year VivaKi Russia has become the largest advertising group in Russia .

Media communication group VivaKi was founded in 2008. It is 100% owned by the French holding company Publicis groupe and unites the global networks of Digitas , Denuo , Starcom MediaVest and ZenithOptimedia .

In the last year, the Russian advertising market is experiencing a crisis caused by the general economic situation.
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Sergey Koptev, Chairman of the Board of Directors of VivaKi Russia, told Kommersant about the impact of advertisers, agencies and sellers on how the import substitution policy acts on the advertising market. He has been working in advertising for almost 25 years.

"Megamind" leads the most interesting statements from the interview .

About the crisis and forecasts of the advertising market development

Forecasts for the development of the advertising market are quite utopian. It is impossible to predict the dynamics of a specific market in isolation from the economy: it all depends on oil prices, currency exchange rates, macroeconomic indicators, etc. In this regard, I cannot make any predictions. Economic departments see the situation better, but their assessments change regularly.

All the forecasts that have come out for the moment regarding the development of the advertising industry next year are quite optimistic that the market will be at the 2015 level. If there is a significant deterioration in the exchange rate situation, inflation — then there may even be a slight increase in rubles. True, I do not consider the exchange rate situation to be a deterioration, I am a supporter of a weak ruble, since in this case there are reasons to expect that local production will start to develop.

About budgets and advertising purchases in new conditions

Most advertising budgets are in foreign currency - just as revenues are estimated in euros and dollars, but all operations are still in rubles. Hence, budgets can be easily revised based on current sales.

In good times, the [negotiation] process was simple: sales houses collected primary information from the market, an idea of ​​how much demand would grow, price expectations were built on this, and trade was going on around this point. Now, in conditions of uncertainty, everything is much more complicated.

It is very likely that next year will be with even fewer annual transactions than this. Many Russian advertisers and some international conducted such transactions - for an annual transaction there is reason to get certain conditions at the entrance. But most of these transactions were reviewed during the year. If in good times, a deviation from the annual deal threatened with substantial penalties, then now they are more liberal with this. It is clear that life makes adjustments - and sales houses and the media understand this.

About media inflation in 2015

On average, the hospital is always normal, just someone in a fever dies, and someone is already cold. The overall price reduction is about 10%. Again, there are media burdened by internal economic factors. For example, in outdoor advertising, fixed costs are very significant, and the area where they can fall is small - payments to municipalities are very high. Therefore, with all the desire and readiness to take into account the elasticity of demand, the corridor for maneuver is rather narrow. Like the print media - the cost of printing, paper: it is impossible to leave below a certain level. On television we will see it too. Programming is different; channels have stated that they will produce less expensive programs.

About the growing share of online advertising

This is a difficult conversation. The Internet is not pure media, it is an aggregation, a method of delivering what used to be on television, in newspapers, advertising publications, mailing lists, etc. At the same time, the delivery method is the most modern and efficient. Naturally, the dynamics of its development is proactive. At the same time, different segments of online advertising are developing at different rates.

There are budget thresholds for entering TV - less than necessary in such coverage media can’t be effectively spent. Therefore, a narrower media is chosen, where all these resources can be used more focused. This and the Internet, in particular contextual advertising, and - under certain circumstances, - radio and thematic channels, specialized publications, etc.

What advertisers suffer from currency fluctuations

In general, advertising investments have reduced the producers of high-value goods affected by currency fluctuations. This is primarily automaking - the business is very inflexible and capital-intensive. As well as manufacturers of household appliances and electronics, with the exception of mobile phones. Developers have reduced their advertising activity less than others, since, despite the crisis, they have invested in real estate, we must somehow implement it.

In the purchase of expensive goods seasonality appeared. Earlier, expensive acquisitions were evenly distributed throughout the year, but now they largely depend on when a person receives vacation pay and, for example, buys a washing machine instead of a vacation. There was a small spring surge in sales, and there will be a pre-New Year microsplash. But on the whole, everything is simple: “desirable” categories suffer, and what one cannot do without shows a much greater stability.

On import substitution and Russian advertisers

I thought that import substitution would happen much faster. But this has not happened yet. Returning to the question of a weaker ruble: with a weak course, there were people who ran into agriculture, started doing something - and literally in two or three weeks the course was played in the opposite direction, and the investment attractiveness disappeared.

[Most prominent advertisers] are mobile operators and retail. But I assumed that there would be breakthroughs in other areas. That, say, "United Confectioners" will quickly begin to enter the market with new brands and product initiatives. The moment for expansion is suitable - you can go beyond your own competence zone, to other adjacent product zones. To replace imports, you need to create products that are superior to analogues. It is necessary not to replace, but to compete.

About VivaKi financial results

At the end of this year, everything will remain at about the previous level. In good times, when budgets were growing very quickly, all reasonable advertisers went to fee (fixed fee) for themselves. And negotiations on its increase have always been difficult: with a large increase in budgets, the fee practically did not grow. But in economically difficult times it turns out to be true in relation to an advertising agency, because budgets are falling, and the fee associated with labor costs remains unchanged.